Does Brexit signal an end, or a new beginning for EU?

As the sun rose over Brussels on Friday morning the European Union awoke to a new dawn. In what had seemed an ominous warning, lightning strikes and torrential rain had engulfed the city throughout the night. The metaphor seemed too obvious.

In fact it proved to be brutally accurate.

The European Union is facing the biggest institutional crisis since its foundation. The organisation which was formed from the ashes of the second World War as a political and trade community but morphed and expanded into something much, much more, was unable to face the scrutiny of its people when it came to a referendum. Just as French, Dutch and Irish voters rejected further EU integration, British voters followed suit. But this time the implications are far more serious as a country was given a democratic mandate to leave the European Union for the first time.

In many ways the signs were evident. Anti-EU sentiment had been brewing throughout the bloc for at least the last decade, expressing itself in national and local elections across the continent where eurosceptic parties, both from the right and the left, have gained ground. The European Parliament elections two years ago were a stark warning. Eurosceptic parties topped the polls, but the European Union continued its onward march, too caught up in the twin crises of the euro zone crash and the migration crisis to realise it was leaving its people behind.

On Friday the European Union was confronted with a reality that most had never countenanced, as Britain voted to leave the organisation it joined 43 years ago.

In the immediate term, the focus will be on staving off financial chaos and preserving liquidity in the banking sector before markets re-open on Monday. Meetings between ambassadors, Commissioners and high-ranking EU officials are scheduled over the weekend in Brussels, with German chancellor Angela Merkel hosting the French and Italian leaders in Berlin on Monday ahead of a two-day leaders' summit that begins the following day.

Already a chasm has opened up between the EU and Britain over the invocation of Article 50, the "exit clause" inscribed in the Lisbon Treaty. While Prime Minister David Cameron has indicated that the formal notification of any decision to leave will only be made when a new Conservative leader is in place, European Commission president Jean-Claude Juncker and senior European Parliament figures made clear yesterday they wanted discussions to commence as soon as possible. European Council President Donald Tusk and Dutch Prime Minister Mark Rutte are believed to be more flexible, while legally it appears to be in Britain's gift when to trigger the Article given that the referendum result is technically not legally binding.

Of more concern will be the nature of the trade agreement Britain will strike with the European Union.

Some have suggested a Norway-style arrangement. The Nordic country is a member of the European Economic Area (EEA) but not the European Union. It has access to the single market but is not part of the Common Agricultural Policy. Crucially however the country has to adhere to EU regulations without having any input into shaping them, and also must subscribe to free movement rules. As a result the Norway-model is likely to be unpalatable to Britain. Switzerland, though similar, has a series of bilateral trade relationships with the EU. But the relationship is complex, and EU officials are opposed to replicating such a deal for Britain. Other options include a customs union such as Turkey enjoys with the EU, or a complete retreat from an EU trade deal into the realm of the WTO, an idea that has been promoted by many leave campaigners, but which would see British goods subject to tariffs up to an average of 15 per cent.

Given the size and importance of the British economy, the most likely scenario is some kind of bespoke trade agreement between Britain and the EU. In addition EU officials believe that other bilateral agreements which include security and defence are likely to be worked out as part of an overall package.

But as the terms of a new British-EU relationship take shape over the coming weeks and months, of more fundamental concern will be the impact of the British exit on the future of the European Union.

What next for the Union? One possibility is that the EU's six founding members – France, Germany, Italy, Belgium, Luxembourg and the Netherlands – reclaim and redefine the idea of the European Union. The foreign ministers of all six countries are due to meet in Berlin today, their third such meeting in the last year.

More likely is renewed integration between the 19 members that share the single currency. The notion of a 'two-speed Europe" – one divided between the euro-ins and euro-out – has long been seen as the logical next step for Europe. Last year's Five Presidents' Report outlined plans for further euro zone integration, though any serious effort to further euro zone integration is unlikely before next year's German elections.

The other possibility is that the European Union disintegrates. There have already been calls for similar plebiscites in France, Denmark, Finland and the Czech Republic.

A Pandora's box has been opened by the British referendum. But whether the British referendum signals the beginning of the end of the EU is another matter. The fact that 19 members are bound together through the single euro currency is one obvious deterrent to a break-up of the union. By choosing not to enter the currency union Britain already had a semi-detached relationship with the EU. Even if there was a legitimate economic case for Ireland following Britain out of the European Union, Ireland is inexorably bound-up with the single currency.

Ireland’s real decision on its long-term relationship with the EU was made almost 20 years ago when it decided to go it alone without Britain and join the euro currency. For small countries like Ireland, there is little choice but to go along with the future direction of the European Union as it develops over the coming years, whether that is dictated by Paris, Berlin or Frankfurt.

Suzanne Lynch is Europe Correspondent